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Objective:
To provide a competitive lease rate with the benefits of ownership.
IASIS Healthcare desired a third party to develop and lease an office building that would accompany the construction of their new hospital in Mesa, Arizona. The lease structure needed to be attractive in a market where there is a strong pull toward ownership.
Solution:
Tegra Healthcare Properties was selected to build the office building based on a competitive lease structure and our successful track record with IASIS. To compete in an ownership-driven market, Tegra utilized Cash Flow Participation for all physicians entering into long-term leases. This agreement allowed the eligible tenants to enjoy some of the fruits of ownership and of value created through their leases without an equity investment on their part. The tenants receive their proportionate share of any and all profits earned by the building. These profits come in the form of quarterly cash-flow distributions, proceeds from refinancing, and finally profits from a sale. In this way, Tegra provides tangible ownership benefits without investment while physicians enjoy the flexibility of leasing and avoid the potential long-term problems associated with condominium ownership.
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